Post-OAL Decision: California LCFS Market Outlook & Prices

Tuesday, 15th July 2025

10:00 am PT

This webinar presents cCarbon’s insights on Post-OAL California LCFS Market Outlook. California Low Carbon Fuel Standard (LCFS) market is entering a critical transition phase, as highlighted in cCarbon’s July 15 webinar. The discussion brought together market analysts and industry experts, including Cory-Ann Wind, to evaluate supply-demand trends, regulatory developments, and price outlooks through the end of the decade.

A key takeaway from the session was the impact of a six-month delay in implementing amended LCFS regulations, which has resulted in a significant buildup of the credit bank. This surplus is expected to trigger the Auto-Acceleration Mechanism (AAM) within the next few years, which would tighten the market by increasing deficits and pushing credit prices upward as the surplus declines.

Renewable diesel continues to dominate credit generation in the LCFS market, but its long-term growth faces uncertainty. Federal policy changes, particularly restrictions under the Clean Fuels Production Credit (45Z), could limit the use of imported feedstocks and reshape renewable diesel supply dynamics. This raises concerns about whether sufficient low-carbon feedstocks will be available to sustain current levels of credit generation, especially as compliance requirements become more stringent.

Electric vehicle (EV) adoption also emerged as a major point of concern. The potential expiration of federal EV tax credits, combined with supply chain challenges and rising costs, may slow EV growth in the coming years. This is particularly significant as the LCFS increasingly relies on electrification for credit generation. The period from 2026 to 2030 is expected to be crucial in determining whether EV adoption can meet policy expectations or fall short, thereby impacting credit supply.

Looking ahead, new fuel pathways such as green hydrogen and sustainable aviation fuel (SAF) are expected to play a growing role in the LCFS. While hydrogen development is gaining momentum, it faces near-term pressure due to federal timelines for tax credit eligibility. Similarly, SAF is projected to contribute significantly to aviation fuel demand by 2030, but reduced federal incentives may shift greater responsibility to state-level policies to sustain investment and growth.

Market outlook scenarios suggest increasing pressure on credit supply as stricter carbon intensity targets take effect. In cases where EV adoption lags and alternative fuels scale slowly, deficits could rise sharply, leading to higher compliance costs. Webinar participants reflected this uncertainty, with varied expectations for future credit prices, though a general trend toward rising prices was anticipated.

Overall, the LCFS market is expected to tighten over time despite the current surplus in credits. The interplay between renewable diesel supply, EV adoption, emerging fuel technologies, and evolving federal and state policies will ultimately determine market stability. As California moves toward more ambitious decarbonization targets, higher credit prices may be necessary to incentivize the investments required to achieve long-term emissions reduction goals.

Following a tumultuous few months of uncertainty, the California Air Resources Board (CARB) announced on Friday, June 27, that it had received approval from the Office of Administrative Law (OAL) for its amended Low Carbon Fuel Standard (LCFS) Regulation. The amended regulation with a new, stricter CI benchmark, is scheduled to take effect in July 2025, covering transactions and volumes of fuel supplied on and after July 1, 2025.

This webinar will provide an updated view on the California Low Carbon Fuel Standard, in the context of new stringency targets.

This webinar will use cCarbon’s CarbonOutlook model to:

Provide an update on total credit bank (since our last forecast in December of 2024).
Discuss our updated projections for supply/demand balance as well as credit price to 2030.
Analyze key shifts in credit-generating sources like electricity, renewable diesel, and RNG.

Join us to understand how the OAL decision and new timelines will reshape the LCFS landscape.

Panellist:

Cory-Ann Wind
Director of State Regulatory Affairs, Clean Fuels Alliance America

Cory Ann Wind

Cory-Ann is the Director of State Regulatory Affairs for Clean Fuels Alliance America, focusing on biodiesel, renewable diesel, and sustainable aviation fuel. Based in Portland, Oregon, she advocates for Clean Fuels’ members with state regulatory bodies, legislatures, and environmental groups, with a primary focus on the West Coast. With 30 years of experience, she previously led the development and implementation of the Oregon Clean Fuels Program at the Oregon Department of Environmental Quality. Cory-Ann holds a Bachelor of Science in BioResources Engineering from Oregon State University.

How to Join

This webinar is open to All cCarbon members, including those on Essential and Analytics Pro plans. Can’t make it live? No problem – the recording and slides will be available in the cCarbon Webinar Archives. Not a member and still interested in attending? Sign up for our Essential Plan to get access to this webinar and a growing library of premium content. You can also simply register, and we’ll reach out with more details.

Post-OAL Decision: California LCFS Market Outlook & Prices

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